Wednesday, August 17, 2005

New Zealand Ponders Peak Oil

The power of accurate observation is often called cynicism by those who have not got it.

George Bernard Shaw.

As we all race to convert the fictitious new capital in our properties into Toyota Prados, LCD screen TVs, and package holidays to the Gold Coast cluelessness in regard to the global energy/economic situation continues unabated.

The single most important ingredient for economic growth is increased energy consumption yet most New Zealanders including a sizable gaggle of dense politicians are yet to make this connection. Energy is the capacity to do work, no energy, no work. Yet energy is taken for granted. At least it has been until about now.

As the price of a barrel of oil continues to march skyward those with a modicum of wetware between the ears have begun asking “why?” There are various ways to answer this question for now I’m sticking to a simple explanation and it can be expressed in a single word - scarcity.

Rampant demand growth for oil across the developed and transitioning economies can simply be translated as desire. Our collective desire for all manner of techno-gadget consumer products, McMansions, V8 SUVs, speedboats, individually wrapped plastic packaged food, weekend recreational shopping and tropical holidays, that is, our greed driven desire for material success grossly exceeds our ability to be happy with what we have got. We are alcoholics to utility maximisation, drunk on instant gratification and heavily in debt because of it. If consumer products were drugs we’d all be lining up at the door of the Salvation Army.

The reason the price of oil is so high is a direct result of out of control desire effectively increasing the scarcity of the resource. The fall of the iron curtain and consequent proselytization of western style individualism and democracy throughout the world has created unprecedented levels of desire for more and more “stuff”. And the only way to ensure we get to
have this stuff is through continued economic growth. The demand to burn increasing amounts of oil necessarily follows.

Thus, as a consequence some might argue of the exploding global capitalistic society within which we live, it is ourselves that have driven the price of oil to its current level. Don’t blame the oil companies blame yourself. And if enlightenment philosopher David Hume was correct in that “all conflict springs from scarcity” the roller door to the double garage of self-destruction has already been opened. Iraq and Iran both swim on a sea of oil and everybody wants it. We want it so bad we are prepared to die for it.

If the current price of petrol, indeed oil were not enough to irritate you, dampen your economic confidence, the looming spectre of “Peak Oil” is certain to rain heavily on the current consumption parade.

We are almost at the point at which half the entire global endowment of oil has been consumed, discovery of oil peaked in the 1960s and despite all technology and the scouring of the earth for more, discovery has steadily declined since. Today we burn almost 84 Million barrels per day. Andrew McKillop an energy economist, argues we will be lucky to increase this figure to a maximum 90 Million barrels, at this point increasing depletion and continued demand will offset new discovery – we’ll be going backwards. With demand growth running at about 3 million barrels per year the current economic world party is likely to last at most another few years – maybe another term of Government.

Already many of the world’s large iconic oil regions are in decline, the North Sea, Norway, arguably or very soon Saudi Arabia. By the end of this decade the western industrial world will descend into a surreal hyper-scarcity miasma. If you think petrol is expensive now, just wait another year or two. Supply of the black oozy lifeblood of the economy will begin shrinking by about 3% per year. Economic growth throughout the western world will end abruptly as hyper-inflated oil prices become structural shortages! Hume’s conflict will manifest itself at the service station as well as the streets of Baghdad.

Some New Zealand politicians (Greens, Labour although it’s not admitting it yet) have already realised this scenario is just around the corner. Some with all the hubris of schoolyard bullies continue to laugh about it (ACT, National, United Future). With an election looming PowerLess NZ invites New Zealanders to make the distinction. Simply email your politician and ask them how they are planning today for peak oil – building more roads obviously is not the correct answer (nor for that matter is dropping out of Kyoto). Don’t accept feel good newspeak answers.

The remainder of this decade will be increasingly defined by energy or a lack thereof. Voters ought to consider this issue seriously; our collective continued well being depends on action now. Well prepared, New Zealand could be well placed to weather such a storm but preparation will require intensive national effort in order to dramatically reduce our dependence on fossil fuels. This election make the right decisions so that the effort can begin.

Steve McKinlay for
Powerless NZ
18 August 2005

Sunday, August 14, 2005

David Lange 1942 - 2005
The Giant Totara Has Fallen.

Photo - Photopress, Dean Purcell

Wednesday, August 10, 2005

Inspired Leadership (fuckwittery) By the New Zealand Government

Projection of short-term Brent oil prices in the December Update are based on futures prices at the time of finalising the forecasts. This sees a gradual decline in prices to US$43 per barrel in March 2005, and to US$40.50 per barrel by March 2006. By the end of the forecast period, the oil price is projected to reach US$35 per barrel...
Source - New Zealand Treasury, Economic Outlook

September 2005, Light Crude Delivery, NYMX (US$65 today)

Tuesday, August 09, 2005

Oil, Mental Retardation and Alcoholism
Transmission Gully Axed!

Maurice Williamson, contendor for the NFI Award of the week, Champion of the Order of the White Elephant either has the same problem as the alcoholic; denial. Otherwise he has some form of mental retardation.

Heather Roy, (ACT) a clueless bimbo with as much understanding of energy as a rodent running on a treadmill might have to share the award with Maurie.

And, Peter Dunne (United no Future), must win the sheer stupidity award for hilariously calling the axing of the Transmission Gully idea as "sheer arrogance", for that's what it would be to go ahead with the nonsense.

Somewhat ironically I often see the United Future big fuck off 4WD global warmer driving round Wellington burning barrels of oil plastered with "United Future Loves the Environment" stickers. It reminds me of quasi-greeny, hairy armpitted soccer mums, their V8 Toyota Prado's parked in the Organics Shop Carpark loading up with organic chooks, GE Free NZ stickers proudly displayed on the rear windows.

As oil prices hit record highs of US$64 a barrel overnight and Goldman Sachs and other investment bankers predict prices out towards $100 a barrel within the next year or so, spending billions building more roads (such as Transmission Gully) is as clueless as opening an Ice Supply store at Scott Base.

In the face of stark facts and admissions of Peak Oil now portrayed by both Chevron (Will You Join and ExxonMobil (In The Outlook for Energy: A 2030 View, the Irving, Texas-based company forecasts that oil production outside the Organisation of the Petroleum Exporting Countries, the cartel that controls three-quarters of the world's oil reserves, will reach its peak in just five years) ACT, United No Future and National are completely out of touch with what is occuring within the oil industry, and what the implications are for the McCrapola consumption driven disposable world we live in.

These cognitively dense, mostly unfit, overweight gits all assume either some cheaper more efficient alternative will be provided by the market, or that oil will drop back to US$20 a barrel and the good times will continue rolling. A vote for either of these parties is essentially the nod to waste billions of tax payer dollars on white asphalt elephants.

Oil at US$20 a barrel - Unfortunately it ain't never gonna happen again. There are alternatives to oil. You can peddle your bike to work, you can run your car on greasy chip oil, but none of the alternatives come at a cheaper price, nor are they more efficient than oil.

Oil is the pinnacle of the flawed supply side market ideology of endless substitution. There are no more efficient, cheaper alternatives. We've hit the top of the curve.

If as Colin Campbell suggests peak oil will occur around 2007, beyond then we will begin to experience structural supply deficits. NZ being at the end of the supply chain and no longer best buddies with the US and Australia can expect to experience shortages quickly.

Violence, no not in Iraq but at the petrol pump will be the first manifestations of serious problems. Dickhead politicians the vast majority of which have ignored the problem will begin jumping around like slaters in a frying pan appealing for calm and that they have the situation under control.

I applaud the Government and Transit NZ for pulling the plug on an exercise in complete stupidity (Transmission Gully). Not only would the NZ tax payer be still paying off this concrete ornament 15 years after no one can afford to drive on it but a billion dollars would have been spent in an attempt to increase suburban sprawl when it could have been put to far more productive future proof use (such as increasing intelligent sustainable transit options).

ACT (a historical and political curiosity after September), National and United (one term wonder) Future are men (and women) of a bygone era. An era of abundance. We need a new way of thinking about our world. A way of thinking that understands the relationship between energy, our economy and the way we live.

Voting for ACT, NZ Future or National at this years election is like shutting your eyes at a busy intersection as you pull out, hoping no one will hit you. These parties are still drunk on the excesses of the 90s. In denial about the present and totally clueless about creating a sustainable future for New Zealand.

Steve McKinlay
PowerLess NZ

Monday, August 01, 2005

January 06 Delivery Sweet Crude hits US$64